To Franchise or Not to Franchise?

I tell each broker we work with the same thing. Every franchise is different and every broker is different. Your decision to franchise or not to franchise should be based on your specific needs.

As a former senior level franchise sales executive, I remain keenly interested in—and aware of—what happens in that space. I also get calls from brokers, large and small, around the country asking us for help in guiding their decision making.

At PCMS Consulting, we primarily help brokerages recruit agents, engage consumers and increase profits. All things franchises do, only without a brand name.

So, what does that make PCMS? And why do existing franchisees pay for our solutions?

At the beginning, we were known purely as a consulting organization. However, as we added technology solutions, people started saying things like, “Gee, you are almost like a franchise.”

Then we started getting calls from franchisees asking us to help them with one thing or another. Today, fully one-third of our clients are affiliated with a franchise brand.

Let me be clear. I am not saying real estate franchises aren’t doing their jobs. They spend millions of dollars to keep their systems ahead of the curve.

But it’s hard to take a system with hundreds or even thousands of franchisees and revamp it overnight—or even over a number of years.

For several years, franchisees slowly emerged from their franchisor’s solutions. These brokers once depended almost exclusively on what their franchisor offered. Now, they eagerly evaluate other options.

Their business model depends on them meeting the demands of consumer and agent expectations.

I liken this to a cruise ship that has to tender because the port is not large enough to accommodate docking. In these cases, passengers are ferried to shore on smaller boats.

So, to franchise or not to franchise?

Some people like the comfort of the cruise ship and don’t mind doing what everyone else is doing. And it’s no problem dealing with 2,000 or more of their closest friends.

But some people like the flexibility of the smaller boat. They can see things they might have otherwise missed if they stayed on the ship.

You can decide to franchise and make the full commitment or franchise and accept that you might have to go outside the mother ship for certain things.

You also have the choice to stay independent and remain free to innovate, upgrade and reinvent at your own pace. There are many options.

I tell each broker we work with the same thing. Every franchise is different and every broker is different. Your decision to franchise or not to franchise should be based on your specific needs.

Here’s my takeaway: If you’re going to franchise, the brand value you accrue from your franchise should not be the only value they bring to you.

Jose Perez is the founder of PCMS Consulting. The real estate solutions provider offers a fixed-price, pay-as-you-go alternative to traditional national franchise systems. PCMS combines real estate consulting with powerful technology to help brokers and agents engage and respond online. Learn more at www.pcmsconsulting.com.

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